I’m presently paging my way through E.F. Schumacher’s legendary and influential book, Small Is Beautiful. It’s the sort of book that, though written 30 years ago about a very different economic and social landscape, still commands immense admiration and respect not only for its profound wisdom, but for its (perhaps even more profound) foresight.
Being foundational to many alternative thinkers and writers today (Wendell Berry included), Schumacher enjoys a position not unlike Augustine in the Christian tradition: reading him is almost boring, because everything he says you already believe. Anyway, I recommend it to anyone seeking a “holistic economic theory,” or (to come at it negatively) a critique of the economic and industrial status quo.
One insight that caught my eye is one recorded in a chapter titled “The Role of Economics.” Schumacher is interested to reign in economics to its proper place. He has watched government policies and global ethics become subservient to the standard of “efficiency” that economics provides: the principle of cost-benefit analysis, with its proverbial “bottom dollar” as the measure of economic (and now governmental and social) goodness.
This has occurred, according to Schumacher, because modern economic analysis offers one of the last “objective” perceptions of reality. In other words, everyone (presumably) agrees about the terms and assumptions of conventional economic reasoning: two dollars are better than one; a “thriving export economy” is better than a humble, provincial economy.
Such a strategy for discerning the best way forward—either for an individual, a business, or a country—often obscures factors and consequences until they pop up ten years later, unannounced, as pollution, cancer, or loss of topsoil. These consequences (along with the factors that would have revealed them) are considered “irrelevant” or “external” to economic accounting because economic accounting counts in dollars. In other words, the cost-benefit analysis requires some common denominator, some “currency,” by which to compare two goods. That’s where money comes in. In the philosophy of modern economics, money is the universal by which we are able to judge particulars. This philosophy is, essentially, reductionist. Money reduces all things to itself. Then it calls the product a thing’s “monetary value.”
Here’s how Schumacher describes the “equating” effect of currency in modern society:
Everything is equated with everything else. To equate things means to give them a price and thus to make them exchangeable. To the extent that economic thinking is based on the market, it takes the sacredness out of life, because there can be nothing sacred in something that has a price. Not surprisingly, therefore, if economic thinking pervades the whole of society, even simple non-economic values such as beauty, health, or cleanliness can survive only if they prove to be ‘economic.’
(Small is Beautiful, pp.47-48)
So Schumacher’s first corollary to the workings of “The Market” is that modern economic reasoning negates any concept of the sacred. This is the first step on the way to thorough secularization. But Schumacher draws a second corollary, hinting at another feature of a secularized society.
[…]what is worse, and destructive of civilisation, is the pretence that everything has a price or, in other words, that money is the highest of all values.
Schumacher’s second corollary needs a bit of fleshing out to appreciate. His point is that in our society money has surpassed its function as merely a “currency,” which Webster defined as “a medium of exchange” having no inherent value itself, to become a thing with the highest value. Thus, we no longer fantasize about having an abundance of food and other necessary supplies (the proverbial “milk and honey” of the Old Testament), but about having loads upon loads of dollar bills. This cognitive state, to say the least, would have been unintelligible to almost all other societies in the history of Western culture, as well as all our contemporaries who have been left untouched by modern economic theory.
But that is not the end of the story. Since money is not only a currency but also a good of the highest value, these two functions become intertwined: other things have value because money—the highest value—confers its value on them.
It’s the precise metaphysical location occupied by God in ancient and medieval Western thought. For Plato—as for Plotinus, Origen, Augustine, and Aquinas after him—God is the highest form of the Good. So all things on earth claiming to be “good” themselves must derive their goodness from him.
Such an enthronement of money as the “highest Good” required this location to be empty. Now, I’m not going to waste any words attempting to map the chronology of the “death of God” in Western thought vis-à-vis the establishment of “money as king,” but I will venture to claim, alongside Augustine (and, among others, the author of the story of the Golden Calf), that we as humans can’t bear an empty throne. We are worshippers at heart; and if we no longer feel the urge to worship God, then someone (or something) else must take his place.
None of this is news to most of us. We’ve all heard many a sermon on Jesus’ dictum “you cannot serve both God and mammon” (Matt. 6:24). But it may be helpful to reflect upon the fact that this idolatrous malady is written into the fabric of our personal economic reasoning—not to mention our national economic policy.